Not sure of your/your wife’s balance sheet and I think the Aussie gov’t got rid of the estate tax in 1979 but the Life insurance may have been a good thing to keep to provide liquidity for your future estate.

Although we have reached the point where my family would do just fine without either me or the proceeds of a life insurance policy, I still have a policy large enough to pay off the home mortgage in place. Once I retire the policy will be terminated – by definition if we have enough to support the family without me working then my family will have more than enough to get by on with me no longer being around to spend money on my vices.

This is pretty relevant to me, because I am applying for life and disability insurance right now. My income is fairly high (about $300,000+) but unfortunately so is my mortgage ($665,000). My income only recently has become that high so my net worth is only about $160,000.

Therefore, I need insurance to cover the gap should something happen (I’m married with 2 kids). I’m getting $1,250,000 for me and $400,000 for my wife for $65/month total.

The disability insurance I am doing as a group through my s-corp and am getting $7,500/ month with 3 month wait period for $50 month.

Once my net worth gets higher I will eliminate both of these, but until then, I think it would be irresponsible to not have it. What are your thoughts?

What are you going to do with that extra $65 that makes you so ready to cancel the insurance? I obviously don’t know anything about your family history, but for $65 to get $1,650,000 of coverage, I wouldn’t be so quick to get rid of it!

I’ve got term insurance as a stop gap- if something happens to me or my wife- as child care is expensive!

@Ryan

As long as you are going with term insurance I think you are doing the right thing. Once you have your number you don’t really need insurance, and it is always cheaper to self insure… but that isn’t likely to be an option for a while.

I don’t believe people should leave lots of money when they pass on. Although I feel you have some responsibility to your family, it should be better served by teaching them to be self sufficient,rather than leaving lots of money behind. They would only do as most lottery winners do. Spend till they are once again dependent on others.

@ Ryan – in your number crunching, I assume that you are factoring in [the rather morbid thought of] the ‘replacement value’ of your wife (e.g. child care etc.), as you will need to protect your high salary?

@ Steve – actually, you do make a good argument for maintaining insurance post-Number (even though, as Rick says, ” it is always cheaper to self insure”) … what happens if you lose disclipline and spend all of your money?

Even though you taught your family to fish, they don’t necessarily actually need to do it … you could keep up your insurance and just forget to mention it (except in the reading of your will) 😉